68 Cyprus Energy Regulatory Authority Introduction CERA was established based on the provisions of the Law Regulating the Electricity Market of 2003. It is an independent public authority which is competent for granting licenses to participants involved in the generation, transmission, distribution and supply of electricity. The activities of generation and supply of electricity concern competitive activities, meaning that the interested parties are given the opportunity, after obtaining the relevant licenses, to be involved and participate on a competitive basis in the electricity market and according to the regulations set by CERA, as independent producers and/or as independent electricity suppliers. Although the activities of generation and supply belong to the competitive part of the electricity market, the EAC as producer and supplier, is regulated by CERA, because it occupies at this stage a dominant position in the market. More specifically, CERA controls and regulates its economic parameters, so as to achieve a healthy environment, allowing new independent producers and suppliers to enter in the market and compete on equal terms. The activities of transmission and distribution of electricity are inherently monopolistic activities. These activities concern the operation and ownership of the transmission and distribution system. The transmission and distribution systems are overhead lines and/or underground cables for the transmission and distribution of electricity from power plants (power plants from conventional generating stations and RES stations) to the end consumers for consumption. The ownership of the transmission and distribution systems belongs to EAC, which obtained the relevant licenses from CERA as OTS and ODS, respectively. The transmission system operation belongs to TSOC following the granting of the relevant license by CERA, which is a legal entity governed by public law. The distribution system operation belongs to DSO, following the granting of the relevant license by CERA, which belongs to EAC. Measure of Market Concentration - Herfindahl - Hirschman Index During the period of this report, Cyprus is in a transitory regulation of the electricity market during which certain transactions are permitted. In particular, in the context of the market opening transitory period, RES producers and electricity suppliers are active. In the first quarter of 2021, in addition to the "EAC Supply", another two suppliers entered the electricity supply sector. These two private suppliers buy green energy which is produced by RES producers and primarily supply commercial and industrial electricity customers under bilateral contracts. ELECTRICITY MARKET
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